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Dec. 17 — Cox Communications Inc. must pay $25 million to BMG Rights Management (US) LLC for failing to take action against known copyright infringing customers, a Virginia federal court jury found Dec. 17.
The jury found that Cox was contributorily liable for its users' infringement of BMG's copyrighted works, and that Cox's conduct was willful. The verdict found that Cox was not vicariously liable for user infringements.
Under the safe harbor provisions of the Digital Millennium Copyright Act, 17 U.S.C. §512(i), an Internet service provider is not liable for infringing activities of its customers, provided that the Internet service provider (ISP) has in place an adequate policy to deal with repeat infringers. Prior to trial, Judge Liam O'Grady ruled that Cox couldn't invoke the DMCA safe harbor because Cox's policy on repeat infringers was inadequate.
The jury's verdict is a testament to the importance of ISP compliance with the safe harbor provisions. The ease with which Internet users can commit copyright infringement, when combined with steep statutory damages for willful infringement, can create massive liability for a non-compliant ISP.
BMG brought a variety of copyright claims against Cox, saying that the ISP ignored its notices that Cox users were infringing BMG's copyrights using the file-sharing protocol BitTorrent. BMG claimed that Cox's policy for terminating repeat offenders' accounts was too lenient as written and was applied even more loosely in order to retain customers and their account revenue.
BMG's lead counsel said in a Dec. 17 statement that the decision sends ISPs a message about their responsibilities to rights-holders.
“We believe this decision sends a message to ISPs that they have a responsibility to act upon and limit the massive copyright infringement that has been brought to their attention by copyright owners,” said Michael Allan, a partner at Steptoe & Johnson in Washington.
Cox's counsel Craig C. Reilly, a solo practitioner in Alexandria, Va., didn't immediately respond to inquiries.
Charles Duan, a staff attorney with Washington-based public interest organization Public Knowledge, told Bloomberg BNA Dec. 17 that his group was concerned the verdict could have a chilling effect on legitimate Internet users.
“This could have a real impact on how Internet service providers treat their customers, in a detrimental way,” Duan said. “The concern is that out of fear of these sorts of verdicts, a lot of ISPs could take a conservative approach, which could lead to account terminations for people using the Internet in legal and reasonable ways.”
Public Knowledge filed an amicus brief in the case.
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The jury's verdict can be found at http://www.bloomberglaw.com/public/document/BMG_Rights_Management_USLLC_et_al_v_Cox_Enterprises_Inc_et_al_Doc/9
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